OK - does anyone still need any proof that political meddling in the housing market food chain has served only to muddy the waters? So who wants what? Do we want people getting into home ownership with more equity, or do we wantt to prop up FHA type organs? (that was a rhetorical question...)

12:31 pm March 11, 2010

Alternate Reality wrote:

Oh my god! What a classical "tail wags the dog". So FHA basically admitted that they are throwing marginal credit at the problem, hoping for the problem to go away? What happens when they are out of marginal credit? Sub-marginal credit will do! "We should give away houses, else we risk double-dip in pricing". This is getting more and more schizophrenic each day...
The douple dip is imminent, and current FHA "support" will only make is worse, more pronounced and prolonged. Else, let's start with FHA "deferred downpayment ARM" loans!

4:23 pm March 11, 2010

Libertarian777 wrote:

so the solution to overpriced housing is to ensure that there's MORE free money given to MORE people who can't afford overpriced houses, to keep the house prices up?

and who has to fund FHA, Fannie Mae and Freddie Mac?

Us, the taxpayer.

7:57 pm March 11, 2010

Jason wrote:

I am a fan of FHA loans and I have been for a long time. I am in a 1 year FHA ARM that I got in 2003 and I'm currently at 4.125%. I am an agent and a lot of my customers have used FHA over the past 10 years and now they own larger homes, larger mortgages and more equity. The loans work when used right.

11:33 pm March 11, 2010

Casey wrote:

All this does is show that the government needs to be completely out of the homebuying process. End all of it. GSE mortgage purchases/guarantees, FHA Loans, VA Loans (and I am a veteran), Tax Credits, Interest deductions... End it all!! If you want a home save up enough to either buy it outright (yes that might take 15-20 yrs but it will be yours) or save up enough down payment that private capital markets would see you as an acceptable risk.

8:06 am March 12, 2010

Gorilla Monsoon wrote:

"...The loans work when used right."
--
That's the rub, isn't it? It seems that the loans were NOT "used right" more often than they were, and now we have a deep reccession and wiped out equity among other things. Why is that, Jason? Who messed this up?

8:47 am March 12, 2010

Alternate Reality wrote:

Here is a detailed write-up on how the goverment's Utopian ideas about "Affordable Mortgages" and "Home ownership society" lead to the unprecedented financial crisis. One of the more comprehensive blogs I have seen:

Government agencies (like FHA) and its employees are one trick ponies. All they can do and will do is repeat the same mistakes. It is evident from the current FHA "views" on downpayment.

12:30 pm March 12, 2010

LAB wrote:

FHA was put in place especially for the person who couldn't come up with even 10%, let alone 3% down. It's been 3% down for the longest time. FHA was never meant to put people into megamansions, as it has over the past 10 years -- 3% down on the first $100,000, with 5% down on the remainder of the purchase price. It was truly meant for creditworthy people who could not come up with a large downpayment. It's not the FHA who's at fault -- it's the banks and mortgage companies that make the loans and then do whatever they have to do to get "the correct paperwork" to complete a loan package to sell on the secondary mortgage market. FHA in and of itself is in the hands of too many local people who have too much input and ability to skew things the wrong way. When the whole pandora's box opens, it's almost irreparable.

1:38 pm March 12, 2010

Alternate Reality wrote:

Bottom line, there is no need to promote "affordable housing". Ownership is not a bliss, but responsibility which ALWAYS requires a certain level of financial sophistication and ability to sustain cash flow. Many people will never own - some because they can't (and shouldn't), other because they don't want (and you certainly can't make them). So ownership is a naturaly occuring phenomenon - when it happens it's there, and when it doesn't...well then it doesn't. It's like promoting "sunny days" or "blue sky" - it's either there or it isn't. The issue is really being exploited by all sides. Government takes the idea and turns it into ideology and a benefit to be "delivered". Private financial institutions and organizations like NAR use this already created ideology for their very private purposes of profiteering. On net basis, it only costs society money and grief. I, for one, always throught that "American dream" was all about self-advancement due to self-improvement, hard work and determination. How and when did roofing, countertops, bathrooms and property taxes were injected into this "dream"?

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